WE have, indeed, come a long way over the past 75 years despite having seriously underperformed both economically and politically. No wonder there is a broad consensus that the country had the potential to do much better which could have taken it much farther. The inconsistent progress and the weak quality of economic growth tell a tale of missed opportunities even with abundant human and natural resources.

In hindsight, it is clear that initial work on the foundations of the new state was less than ideal. We can rationalise why it was what it was, but there is no point denying critical factors related to, say, institution-building and nation-building. After almost half-a-century of having the country’ Constitution (1973), it is unfortunate that the working masses are still longing for a decent living standard and equitable economic opportunities in a country whose dependence on donors to keep the economy afloat is only increasing.

The deck is visibly loaded against the poor, the minorities and the country’s women even before they get a chance to play their hand. This exposes the dysfunctionality of the state and the bankruptcy of planning by the coterie at the helm; the ruling elite.

In 2000, UN members adopted the Millennium Development Goals (MDGs), and, at the end of the designated 15-year period, they adopted the Sustainable Development Goals (SDGs) for the next 15 years, pledging to end poverty and curb inequality for sustainable and inclusive development across the world. Each UN member country was tasked with translating the goals into benchmarked quantifiable targets to trace and track national progress. Pakistan failed in self-set targets in all the seven MDGs, while progress on the 17 SDGs has been quite unsatisfactory thus far.

The benefits of Pakistan’s economic growth have accrued mainly to powerful elites patronised by the state, preventing any broad-based improvement in living standards and the general quality of life.

All three pillars of state in Pakistan, it seems, have a problem with the poor rather than poverty. State institutions seem ultra-sensitive to the needs of the fortunate few who are already well positioned to make do without special care. Wealth begets wealth, but it multiplies geometrically when facilitated by the state’s policies, and assisted by state structures.

It is not surprising, then, that the elite have amassed wealth in record time without judiciously paying taxes, taking risks, facing competition or delivering productivity gains. Regardless of the party in power, their interests are mostly secure. Their fortunes though have shone brighter under dictatorial regimes.

As inequality continued to worsen over the years, the government stopped reporting the embarrassing reality. The chapter on ‘income and regional disparity’ in the Economic Survey of Pakistan was first merged with the one on ‘poverty’, and was later dropped altogether. The issue of inequality has been highlighted by some writers and in certain studies by economic research entities, but it fails to capture the attention of the relevant quarters in any meaningful way.

Luckily, the UNDP’s National Human Development Report 2021 attempted to shed new light on stark income inequality and the economic privileges of the elites in Pakistan. These elites include those from the corporate sector, the landed aristocracy, the military and the political hierarchy. The estimated cost of favours they receive, according to the said report, is Rs3.6 trillion ($17.4bn), or roughly 6pc of the national economy.

The corporate sector has been identified as the biggest beneficiary of the privileges in the form of tax breaks, cheap input prices, higher output prices or preferential access to credit, land and services. The richest 1pc, who collectively own 9pc of Pakistan’s wealth, are found to be the second in order of unearned privileges. The feudal aristocracy, which makes up 1pc of the population but owns 22pc of all arable farmland, stands third. The UNDP found that the military — with its huge business, public works and real estate interests — receives Rs355.3bn ($1.7bn) in privileges.

The richest 20pc in the land command 50pc of the national income, while the poorest 1pc holds a mere 0.15pc of that pie. The report also highlights regional inequalities in service delivery, with high-income areas receiving higher public expenditure.

For a deeper historical insight on multidimensional inequality and how it evolved in the country, the 75-year period can be divided into seven phases: 1947-58, 1959-71, 1972-78, 1979-88, 1989-1998, 1999-2008, and from 2009 to date. Key factors that influenced the government’s approach towards disparities include the type of the government, the international alignments and the economic thought that influenced the direction of the public policies.

In the initial phase, there were abrupt changes in government as it was overwhelmed by problems and too preoccupied by the survival of the new state to care about anything else. In this period, competing interests wrestled for the upper hand in the power structure, while a mixed approach was followed in the economic sphere.

The second phase was marked by military takeover and a mixed approach towards the economy, borrowing ideas from both capitalist and socialist models. The regime hand-held the feeble business class. It established the Pakistan Industrial Development Corporation (PIDC), which used public resources to establish industry, and handed it over to the private sector on a platter.

Gen Ayub Khan also introduced high-yielding seeds to initiate the Green Revolution and continued with the five-year plans that were initiated in 1955, borrowing the idea from the erstwhile Soviet Union.

During this period, the state was ideologically more inspired by the market model. It was an expressed state policy to promote the concentration of wealth, mentioned in as many words in the Second Five-Year Plan (1960-65), to realise higher investment rates.

Despite near 6pc annual growth rate, inequality touched new peaks. Renowned economist Dr Mehbub ul Haq, the architect of the Second Plan, wrote a booklet titled Poverty Curtain in 1969 in which he argued that 22 business families had come to control much of industrial, banking and insurance sectors in Pakistan. Despite the high average growth rate, public discontent burst out on to the streets, leading to uprising in East Pakistan and culminating in the country’s dismemberment.

In the third phase, the populist government introduced agriculture reforms and opted for a nationalisation policy to free the economy from the shackles of powerful monopolies. In this period, the pace of growth almost halved to an average 3pc. The economic crisis was deepened by the oil shock of the 1970s. The phase ended with the military once again in the saddle.

In the fourth phase, global and geopolitical concerns ensured free flow of dollars to the country, creating some fiscal space for the government to do something substantial in economic terms. Instead, the majority of the population remained far away from the minds of those who reported serious improvement in GDP growth.

The fifth phase saw a return to democracy, but political stability could not be secured. Four elected governments were dismissed successively and prematurely on charges of corruption. Such instability did not allow the GDP growth to sustain itself and the annual average growth rate dropped to 4pc. The phase ended with another general taking over the reins of the country.

Though the government was clueless at the beginning of the sixth phase, the 9/11 episode came to its rescue and overnight Gen Pervez Musharraf started rubbing shoulders with the high and might leading the so-called ‘war on terror’. From a pariah state, Pakistan became the most favoured nation, receiving a steady flow of dollars once again, which, once again, were used to offer patronage to the urban and feudal elite.

During the last and continuing phase, four governments — one each of the three major parties and the current coalition — have been in power. The high mark of this phase in economic terms has been the multibillion-dollar China Pakistan Economic Corridor (CPEC). Beyond lip service, the last 14 years have seen nothing to suggest that any of the four dispensations gave any attention to the issue of growing inequality in society. The famed common man, in whose name and for whom all decisions are apparently taken, keeps looking on in utter disbelief.

The writer is an economic journalist.

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